KUALA LUMPUR: Malaysia has been ranked third in the 2017 Global Retail Development Index (GRDI) for the second consecutive year.
Management consulting firm A.T. Kearney attributed the high ranking to the influx of tourists, higher disposable income and government investments in infrastructure, all of which had boosted the retail industry.
“Malaysia’s retail market continued to grow despite a slight dip in overall GDP growth and short-term pressures of currency fluctuation and inflation.
“The long-term prospects of the sector continue to remain strong. Retail sales in Malaysia grew 3.8 per cent in 2016, driven in large part by a 6.1 per cent increase in private consumption.
“This was despite the headwinds of a depreciating currency and the 2015 rollout of a new goods and services tax (GST),” the firm said in a statement today.
The number of tourists, the firm stated, is projected to grow from 26 million last year to 36 million by 2020.
“Tourism is a cornerstone of the government’s long-term growth plan. The numbers (of tourists) are expected to be boosted by Chinese travelers, who have been granted visa-free entry since March 2016."
Its Partner and Head of Southeast Asia Soon Ghee Chua said the country’s successful performance in this year’s Index is consistent with the increased interest foreign retailers are showing in this market, in both traditional and online channels.
Aggressive moves, he said, are being made into the convenience segment by companies such as Japanese retailer Aeon who is set to triple its number of stores in Malaysia to 150 within the next three years.
“Meanwhile, online retail is expected to grow at 23 percent per year through 2021, driven by electronics and media.
“The growth in online retail, along with the rise in mobile phone adoption across the nation, will continue to provide momentum to the sector’s growth and attract further investment.” he added.
The GRDI, now in its 16th edition, ranks the top 30 developing countries for retail investment worldwide, by analysing 25 macroeconomic and retail-specific variables.